November 13, 2009

Enemies of the Middle Class

Further review of the Democratic losses last week along with recent polls showing Republicans beating Democrats in the generic congressional ballot demonstrates the impact of only ten months of Democratic governance on Independents. In Virginia, New Jersey, and now nationally, we’re seeing the exact same dynamic: Republicans are supporting Republicans, Democrats are voting Democrat, and Independents, after having installed a Democratic government just one year ago, are moving heavily towards the GOP. Note that this coalition — let’s call it the McDonnell/Christie Coalition — is quite distinct from the last Republican majoritarian coalition that brought the GOP to power in 2004. In ’04, the GOP won because voters on either side of the political fifty yard line ran to their respective end zones, and the voters on the Right were just a tad more fired up than voters on the Left. This year, the American middle is still in the middle, but centrists and Independents are voting Republican by a lopsided margin, just as they voted Democrat by a significant margin in 2008.

The movement towards Republicans on the part of swing voters shouldn’t be surprising, as pretty much the entire Democratic agenda thus far has amounted to a (largely failed) attempt to enact a huge burden on the very middle class, middle of the road, Middle American voters who brought Democrats to power in the first place. By ignoring the unintended consequences of their policies and by misreading their mandate, Obama and congressional Democrats are on the verge of losing the republic that Americans handed them just one year ago.

Last year, I wrote extensively about the plight of the average middle class American, and of the manner in which regular Americans are beginning to feel that the American Dream is being extinguished. Once upon a time, working hard and playing by the rules was all that was necessary to achieve a comfortable and rewarding life in a nation which values opportunity and meritocracy, and which promises equality under the law for all, regardless of national origin, religion, and so forth. But as the cost of housing, education, and health care rose, and as wages, benefits, and job growth shrank, and as the growth of government at home and its actions abroad sent the American people a bill which could only be paid for via fiscal collapse or massive future tax increases, Americans began to wonder whether the nation’s best days were behind her and whether the American Dream was, in fact, dead. Democrats ran as champions of the middle class and unsurprisingly won massive majorities.

But less than year into their reign, the heroes of the middle class have been revealed as enemies of the middle class, as Democrats have spent 2009 pursuing policies that essentially constitute what is probably the largest middle class tax increase in American history. They are, in no particular order:

The Stimulus: The president and congressional Democrats promised that adding a trillion dollars to the national debt was necessary to stimulate the economy and prevent a depression. Instead, unemployment has continued to increase, and most of the stimulus has yet to even be enacted, as the package was largely a Trojan Horse filled with funding for every Democratic domestic program under the sun. Because the national debt will eventually have to be paid off, this means that the president and Congress gave American taxpayers a trillion dollar bill during the worst recession since the Great Depression, one that will ultimately lead to a massive tax increase on the middle class, and one that did nothing to actually restore the economy and create jobs.

The Bailouts: The Obama Administration and congressional Democrats seemed to have no qualms about using the tax dollars of the American people to bail out the nation’s robber barons who had reached the precipice due to practices such as imprudent and predatory lending and slapping interest rates on lines of credit that would once have been considered usury. The average American, who most certainly did not find himself bailed out of his mortgage or his car payments or his student loans, could do nothing but sit back and watch as his tax dollars were used to bail out the very folks who were simultaneously raising his interest rates on all of those things. Instead of letting poor business decisions be punished by the marketplace, which would disincentivize similar practices in the future, the Obama Administration ensured that no lessons were learned, no robber baron or archaic motor company was allowed to fail, and no American taxpayer would be able to avoid the bill.

Cap and Trade: The Administration itself has privately concluded that this legislation would essentially amount to a 15 percent tax increase. What could go wrong?

Health Care: While small-bore reforms are definitely needed to lower the cost of health care and help more Americans get insured, the health care reforms proposed by Democrats all have one thing in common, and that’s an increased financial burden on the middle class. Even without the creation of a new middle class entitlement in the public option, guaranteed issue, which is a feature of all the Democratic plans, has increased health insurance premiums in every state in which it’s been implemented. This means that the average middle class American will see his or her health insurance premiums go up if ObamaCare becomes law. Under ObamaCare, subsidies are phased out well before they impact most middle class Americans. The poor will have government assistance to help them pay their premiums, and the jet set can simply take more money out of their trust funds. But the middle class will bear the brunt of ObamaCare, being handed higher premiums with few new benefits in return.

Afghanistan: With the nation nearing fiscal collapse, the last thing that Americans want to do is continue to pour blood and treasure into a tribal nation stuck in the 10th Century due to the notion that it’s somehow our moral imperative to do so, or that the sword can be used to modernize such a society. Neither is true. If it’s our job to save the world, then why not all of Sub-Saharan Africa? Why are we not attempting to send troops to every banana republic in Latin America? We don’t because we can’t. In the real world, resources are finite. Americans realize that it’s time to conserve ours, which is why large majorities of Americans now oppose the war in Afghanistan and oppose sending more troops to Afghanistan. Every penny that is added to the national debt because of Afghanistan will come directly out of the pockets of the middle class in the form of some future tax increase.

In sum, the Obama Administration and the Democratic Congress are running up a massive bill and sending it to the same middle class that elected Democrats to save it from its economic woes. Apparently, Democrats thought that the middle class was electing them out of some masochistic desire to be further squeezed in order to solve all of the world’s problems, from global warming to the societal travails of distant lands. Democrats are about to find out what Republicans found out last year: at the ballot box, there’s nothing more powerful than an army of disgruntled white collar professionals who make $50,000 a year. In the Nixon era, these folks were called Cloth Coat Republicans. Now they’re Cloth Coat Independents. And they’re the most potent political force in America today.

by @ 12:01 am. Filed under 2009 Elections
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20 Responses to “Enemies of the Middle Class”

  1. Kevin Says:

    While I completely disagree with most of this post, I would like to highlight the Afghanistan part, which I do agree with.

    In addition to me agreeing with it, I also think it would be a smart stance for Republicans to take, especially if Obama decides to send more troops. I think a more non-interventionist foreign policy could greatly help the Republican party, particularly with independents and the middle class. The average white collar American does not want his hard-earned dollars going to fund a unwinnable war in the middle of nowhere.

    It never made any sense to me how so many Republicans preach the importance of small government and keeping government out of things, yet they hold massive military spending, and constant and costly wars as vital.

  2. MPC Says:

    Republicans know some wars are unnecessary, but no Republican wants to retreat from a war that will tarnish America by so doing. A war that is just, right, and winnable. Lest we forget the Taliban sponsored the attacks on American soil in 9/11. I’d be supportive of Obama allowing McChrystal time to implement his strategy, a year perhaps to get things going, to then asses just how viable it will be for us to remain in and what it would take from there to eliminate the Taliban. As Petraeus in Iraq showed a well-played strategy can in the long run do the unthinkable.

    Remember, Dems grilled Bush for never listening to his generals. We wouldn’t want Obama to make the same mistake ;)

  3. Aron Goldman Says:

    Americans realize that it’s time to conserve ours, which is why large majorities of Americans now oppose the war in Afghanistan and oppose sending more troops to Afghanistan.

    Those claims are simply not substantiated by current polling data.

    Gallup: Americans Split on Afghanistan Troop Increase vs. Decrease
    November 12, 2009
    http://www.gallup.com/poll/124238/Americans-Split-Afghanistan-Troop-Increase-Decrease.aspx?version=print

    Which of the following would you like to see President Obama do? Increase the number of U.S. troops in Afghanistan by the roughly 40,000 the U.S. commanding general there has recommended. Increase the number of U.S. troops in Afghanistan but by a smaller amount than the 40,000 the U.S. commanding general there has recommended. Keep the number of U.S. troops in Afghanistan the same as now, or begin to reduce the number of U.S. troops in Afghanistan.

    Increase troops by 40,000: 35%
    Increase troops by less than 40,000: 7%
    Keep number of troops the same: 7%
    Begin to reduce number of troops: 44%

    Among Independents

    Increase troops by 40,000: 36%
    Increase troops by less than 40,000: 7%
    Keep number of troops the same: 8%
    Begin to reduce number of troops: 43%

    Among Republicans

    Increase troops by 40,000: 57%
    Increase troops by less than 40,000: 6%
    Keep number of troops the same: 7%
    Begin to reduce number of troops: 26%

    Quinnipiac Ohio Political Survey
    November 12, 2009
    http://www.quinnipiac.edu/x1322.xml?ReleaseID=1396

    Do you think the U.S. is doing the right thing by fighting the war in Afghanistan now, or should the U.S. not be involved in Afghanistan now?

    Doing the right thing 48%
    Shouldn’t be involved 43%

    Among Independents

    Doing the right thing 46%
    Shouldn’t be involved 43%

    Among Republicans

    Doing the right thing 71%
    Shouldn’t be involved 22%

    General Stanley McChrystal, the top U.S. commander in Afghanistan, has asked President Obama to send 40,000 additional combat troops. Should Obama send the troops or not?

    Yes 51%
    No 40%

    Among Independents

    Yes 50%
    No 39%

    Among Republicans

    Yes 77%
    No 18%

    NBC/Wall Street Journal National Political Survey
    October 27, 2009
    http://msnbcmedia.msn.com/i/MSNBC/Sections/NEWS/091027_NBCPoll.pdf

    Would you strongly support, somewhat support, somewhat oppose, or strongly oppose increasing troop levels in Afghanistan?

    Strongly support 28% [19%]
    Somewhat support 19% [25%]
    Somewhat oppose 15% [20%]
    Strongly oppose 28% [31%]

    I’m going to read you possibilities for next steps in Afghanistan. For each one please tell me whether this would be acceptable to you or not acceptable to you.

    Sending an additional ten thousand U.S. troops and focusing on fighting insurgents in some areas and putting additional emphasis on training for Afghanistan’s army and police.

    Acceptable 55%
    Not acceptable 36%

    Sending an additional forty thousand U.S. troops and focusing on fighting insurgents across the country and protecting the Afghan people.

    Acceptable 43%
    Not acceptable 49%

    When it comes to making major decisions on overall military strategy and the number of troops needed, such as in Afghanistan, who do you have more confidence in to make the right decisions––the president and secretary of defense OR the generals running operations in the country?

    The generals running operations in the country 62%
    The president and secretary of defense 25%

    Thinking about Iran, if Iran continues with its nuclear research and is close to developing a nuclear weapon, do you believe that the United States should or should not initiate military action to destroy Iran’s ability to make nuclear weapons? Do you feel strongly about that, or not?

    Feel strongly the U.S. should initiate military action 45%
    Feel the U.S. should initiate military action 7%
    Feel the U.S. should not initiate military action 10%
    Feel strongly the U.S. should not initiate military action 27%

    Fox News/Opinion Dynamics National Survey on Afghanistan
    October 17, 2009
    http://www.foxnews.com/projects/pdf/101609_poll.pdf

    Do you support or oppose sending additional U.S. troops to Afghanistan?

    Support 46% (41%)
    Oppose 46% (50%)

    Among Democrats

    Support 32% (30%)
    Oppose 61% (62%)

    Among Republicans

    Support 65% (58%)
    Oppose 29% (31%)

    Among Independents

    Support 40% (35%)
    Oppose 50% (58%)

    Who do you trust more to decide next steps in Afghanistan — the top commander in Afghanistan General Stanley McChrystal or President Barack Obama?

    General Stanley McChrystal 62%
    President Barack Obama 22%

    Among Democrats

    General Stanley McChrystal 45%
    President Barack Obama 36%

    Among Republicans

    General Stanley McChrystal 85%
    President Barack Obama 5%

    Among Independents

    General Stanley McChrystal 56%
    President Barack Obama 25%

  4. Aron Goldman Says:

    Digging Deeper on Independents
    http://publicpolicypolling.blogspot.com/2009/11/digging-deeper-on-independents.html

    We all know that a big part of the Republican successes in New Jersey and Virginia last week had to do with Chris Christie and Bob McDonnell’s ability to win over independent voters.

    I want to go a little deeper than that though, and talk about the differences between McCain independents and Obama independents- and why the latter group will be the most influential voter bloc in next year’s elections.

    Independents who voted for John McCain are more or less Republican voters who don’t call themselves that. In Virginia they voted for McDonnell by an 89-8 margin and in New Jersey they went for Chris Christie by an 88-6 margin. On the generic Congressional ballot for next year they go 70-2 for the GOP in Virginia and 78-3 in New Jersey. These are not your imaginary sort of independents who are centrists and swing from one party to the other on an election by election basis- they are conservative, Republican voters who just don’t attach that label to themselves.

    The Obama voting independents in New Jersey and Virginia are more of your true swing voters. They only went for Creigh Deeds by a 66-32 margin and their support for Jon Corzine was only 52-24. Looking toward next year they support Democrats 48-24 for Congress in Virginia and 50-11 in New Jersey.

    These are the kinds of voters who may be looking for a division of power. Obama’s approval with them in Virginia is 67% and in New Jersey it’s 75% so Congressional Democrats are running well behind his level of support. The relatively high number of undecideds with them in both states would seem to indicate they aren’t enthralled with the Democrats in DC but they aren’t real sold on the Republicans either and they’re going to vote for whichever side does the better job of winning them over.

    The biggest factor in who wins next year will be turnout and which party can mobilize its voters to get out and vote, but if you want to talk about the most persuadable group of the electorate it’s the independents who voted for Obama. Their decisions could decide a lot of close races.

  5. Heath Says:

    Another great post from Dave.

    Easily the best front-pager we have on here.

    Keep up the good work!

  6. Heath Says:

    The Taliban are not my cup of tea but they aren’t Al Queida.

  7. MPC Says:

    They did sponsor them, though. They clearly sympathize with wanting to destroy the “Great Satan”, else they wouldn’t harbor an organization devoted to attacking America. They’d have been far better off never affiliating with them.

    But that’s not the case. They were complicit in attacking our country, and Obama needs to man up and fight that “good war” he talked about all last year and actually do something for once.

  8. Alex Knepper Says:

    The last voters to get on board with Obama were blue-collar workers and old people. They’re now the first to get off board.

  9. Right Says:

    Has anyone heard from Iraq lately? Me neither, and this was the ‘lost’ war according to Harry Reid. Sorry ‘Bama, Afghanistan was your most favoritest war, you loved it so much that you were willing to let Iraqis suffer under Saddam so we can fight the proper terrorists in Afghanistan. Oops! There are no terrorists anymore because you said so. What a waste of lives to have this dithering mother f*cker in charge of our army. Tsk tsk.

  10. Heath Says:

    Maybe the Iraqi badies are winding down the clock until we leave and then all hell will break loose? Hope not.

  11. MWS Says:

    Dave,

    Great post again.

    Of course, Democrats are still selling the delusion that they can give everyone everything they want and make only those earning over 250k pay for everything.

    Of course, they know themselves that it is a lie, which is why they are looking for stealth taxes like Cap and Trade (global warming is but the useful fiction to justify), insurance mandates, and VAT.

  12. DanL Says:

    Dave, thanks for speaking out against our continued presence in Afghanistan. We need more principled republicans who will do so.

  13. MWS Says:

    Is Obama finding religion, or is this more talk from the Prince of Platitudes?

    http://www.politico.com/news/stories/1109/29471.html

    My guess is, more talk. He was saying earlier this year the “era of fiscal irresponsibility is over” while he tripled the deficit. He said that the government is basically broke while he pushed for the Entitlement to End All Entitlements. This is the guy who thought demanding 100 million in cuts from the budget (with much chest thumping and bravado) would prove his deficit hawk bona fides.

  14. MWS Says:

    I think voters’ may finally be waking up to the perils of a $12 trillion (and accelerating) national debt. We face the prospect now that if interest rates rise just to late 80s and early 90s levels (which is probably modest considering inflationary pressure, the weakening dollar and the drying up of demand for Treasuries) could absolutely sink our government, forcing truly confiscatory taxation, massive and immediate cuts in Soc. Sec., Medicare, and defense, just to service the INTEREST.

    In 3 years, the debt will be around 16 trillion. If the average coupon on a treasury at that point (remember Treasuries are loaded towards the short end, so they turn over a lot) is just 7%, we would be paying over $1.1 TRILLION in interest alone. This year, we are collecting somewhere around $2 trillion or less in taxes.

    I’m telling you guys, this debt could make the current recession look like but a minor tremor before the real earthquake.

  15. Aron Goldman Says:

    The Obama Administration and congressional Democrats seemed to have no qualms about using the tax dollars of the American people to bail out the nation’s robber barons who had reached the precipice due to practices such as imprudent and predatory lending and slapping interest rates on lines of credit that would once have been considered usury.

    Give Me Goldman Over Gandhi
    by Jonathan Hoenig
    http://www.smartmoney.com/investing/economy/give-me-goldman-over-ghandi/

    I have to laugh when I hear about greedy, unscrupulous financiers supposedly ripping off “hard working Americans.” While it might make a sympathetic story on the 11 p.m. news, my own experience in subprime lending led to big losses for me, not the borrower.

    Three years ago I wrote about Prosper.com, a micro-lending marketplace where investors have made $183 million worth of loans since 2005. Prospective borrowers post eBay-style ads outlining their credit?history and planned use for the money. Lenders bid on pieces of the loan and receive their corresponding share of interest payments. At one point I had invested in well over 1,000 loans.

    Some had rates as high as 36%. And while that might seem usurious to politicians in Washington, the reality is that interest?rates on everything from mortgages to motor homes are not arbitrary. As a lender on Prosper, I quickly learned firsthand that the reason credit cards and other unsecured lenders must charge such high?interest?rates is because many borrowers quite simply do not pay them back.

    We’re accustomed to ridiculing bankers as destructive imbeciles who screw the public as they pocket extravagant bonuses. The fact is that banking is a difficult business. Even with many of my microloans yielding more than 25% — my portfolio lost money as defaults far outweighed interest income. My investment lost thousands and thousands of dollars.

    What bothers me isn’t losing money – after all, it’s a risk I took voluntarily that was an inconsequential part of my portfolio, rather the relentless demonization of lenders like myself who suffered large losses as a result of borrowers that didn’t pay their bills. According to a 2008 Harris Interactive poll, the majority of Americans blamed bankers for the economic crisis. Only a quarter of those surveyed this year believe banks are trustworthy and honest.

    To default on a loan is one thing. But to default and blame the lender — that takes moxie.

    Earlier this week Goldman Sachs CEO Lloyd Blankfein was roundly criticized for saying his company was doing “God’s work.” Yet in a free market, lenders do perform a vital social function, facilitating people without money to borrow from those who do have money. Both parties benefit and wealth is created. “We help companies to grow by helping them to raise capital” Blankfein told The Times of London. “Companies that grow create wealth.”

    Our own history validates his claim. Bankers and moneylenders funded Spain’s exploration of the New World, America’s colonization and productive advancements ranging from the Model T to the Palm Pre. And even with the most altruistic and self-sacrificial intentions, Gandhi or Mother Teresa herself couldn’t have built the Brooklyn Bridge, or Wal-Mart, or Kubota, or the Apple iPhone. We could pray day and night for such advancements to miraculously appear or we could, to paraphrase John. F. Kennedy, realize that on earth, God’s work must truly be our own. Bankers do a large part of that work.

    I lent thousands of dollars to “hard working Americans” who never bothered to pay me back. Yet in our culture, it’s the lender we demonize, not the borrowers who fail to live up to their end of the deal.

    Bankers and financiers are productive, wealth-creating and essential parts of a market economy. To denigrate their efforts is to blame the victim for the scofflaw’s crime.

  16. Aron Goldman Says:

    Meet John Thune
    By David Brooks
    http://www.nytimes.com/2009/11/13/opinion/13brooks.html?_r=1&pagewanted=print

    Some days the Republican Party seems to be going crazy. Its public image is often shaped by people who appear to have gone into government because they saw it as a steppingstone to talk radio.

    But deep in the bowels of the G.O.P., there are serious people having quiet conversations. The people holding these conversations created and admired Bob McDonnell’s perfectly executed Virginia gubernatorial campaign. And now as they look to the future of their party, and who might lead it in 2012, the name John Thune keeps popping up.

    As you may or may not know, Thune is the junior senator from South Dakota, the man who beat Tom Daschle in an epic campaign five years ago. The first thing everybody knows about him is that he is tall (6 feet 4 inches), tanned (in a prairie, sun-chapped sort of way) and handsome (John McCain jokes that if he had Thune’s face he’d be president right now). If you wanted a Republican with the same general body type and athletic grace as Barack Obama, you’d pick Thune.

    His positions on the issues are unremarkable. He is down-the-line conservative on social, economic and foreign policy matters. What’s notable is the way he talks about the issues and jumps off from them.

    He is a gracious and ecumenical legislator, not a combative one. When you ask him to mention authors he likes, he mentions C.S. Lewis and Jeff Shaara, not political polemicists. The first person who told me I had to write a column about Thune was a liberal Democratic senator who really likes the guy.

    Thune also possesses the favored Republican profile du jour: conservative at the roots but pragmatic at the surface. Like McDonnell, nobody can question Thune’s conservative bona fides. As a result, he doesn’t have to talk about them. Instead, he prefers to talk about what he calls the “economic cluster” of issues: job creation, balanced budgets and small-business-led growth.

    He doesn’t have radical plans to cut the federal leviathan. He just wants to restrain the growth of government to bring deficits down. He doesn’t have ambitions to restructure the tax code. He just wants to lift burdens on small business.

    He says his prairie background has given him a preference for small companies and local government. When he criticizes the Democrats, it is for mixing big government with big business: the bailouts of Wall Street, the subsidies to the big auto and energy corporations. His populism is not angry. He doesn’t rail against the malefactors of wealth. But it’s there, a celebration of the small and local over the big and urban.

    Republican pros are attracted to Thune because he could rally the hard-core conservatives without scaring away the suburbanites. His weakness is that he’s never really worked outside of government, and he’s almost never shown a maverick side.

    Republicans are still going to have to do root-and-branch renovation if they hope to provide compelling answers to issues like middle-class economic anxiety. But in the meantime, people like Thune offer Republicans a way to connect fiscal discipline with traditional small-town values, a way to tap into rising populism in a manner that is optimistic, uplifting and nice.

  17. O. Pike Says:

    Look at what is hidden in the over 1000 page Health-Care Bill that the majority of American people did not want!
    Buried deep within the over 1,000 pages of the massive US Health Care Bill (PDF) in a “non-discussed” section titled: Subtitle C-11 Sec. 2521— National Medical Device Registry, and which states its purpose as:

    “The Secretary shall establish a national medical device registry (in this subsection referred to as the ‘registry’) to facilitate analysis of postmarket safety and outcomes data on each device that—‘‘(A) is or has been used in or on a patient; and ‘‘(B) is a class III device; or ‘‘(ii) a class II device that is implantable.”

    In “real world speak”, according to this report, this new law, when fully implemented, provides the framework for making the United States the first Nation in the World to require each and every one of its citizens to have implanted in them a radio-frequency identification (RFID) microchip for the purpose of controlling who is, or isn’t, allowed medical care in their country.
    http://waysandmeans.house…

    This is very dangerous: Everyone needs to sit down and see this video that shows just how corrupt our American and English Government and Governments around the world have become, if only in order to prepare for the damage they are doing to our country’s monetary and resource systems, that will affect you and all of us and our lifestyles! Give yourself the chance to be prepared by looking ahead! Here is the link:http://www.youtube.com/watch?v=VebOTc-7shU

    Call and write, visit your senator have him vote against and kill the Obama Health-Care Bill! Save your own life!

  18. FredsFighter Says:

    Cheers on the post, Dave. I agree with the majority of those items. As a card-carrying member of the middle class myself, I’ve definitely heard the sound of stimulus and bailout money zooming by me only to go to those who seem less-deserving. I, along with many others, have felt punished for being personally fiscally responsible.

  19. Richard Murray Says:

    #17 I’m betting you’re a supporter of Rep/Dr Ron Paul, aren’t you?

  20. Heath Says:

    I’v heard he may support rapists and hate gays but assuming that’s not true why don’t we talk about Thune more around here?

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